Friday, December 2, 2011

Working in (and on) the margins.

I worried as I took more time off over the last year that I would lose connection to the store.

I don't think that is going to happen.

I've learned that, without being totally conscious of it, I was pacing myself when I was working full-time. I knew that opening at 11:00 instead of 10:00 had been a huge deal. I knew that stringing days off together mattered, instead of having them interspersed through the week. I'll probably never again let my employees dictate MY hours: I'll either hire enough part-timers or have employees who work the hours I want.

Working less days has been nice. But on the days I do work, I'm working much harder. I'm not sure the energy expenditure is diminished as much as I would have thought. I find myself going to the store on my day's off to finish some of the tasks I haven't competed.

Anyway, the store is always going to be a challenge. That is never going to change. I'm always going to need to be plugged in.

Just in the last two years, the rise of the digital and e-book has created a whole new set of problems to deal with.

My answer to this is to continue to diversify, to move to the margins -- as it were. Up until now, I've had the benefit of comics and graphic novels being half of my business. More or less solid and reliable and with a profit margin that stayed somewhat constant. I'm not sure I can count on that forever, as each comic company announces 'digital' initiatives.

The other half of my business was already made up of product that were "sidelines" if you will. Sports cards and non-sports cards, manga and anime, toys, games (role-laying, collectible card games, and boardgames), new and used books. I look for niches in each of these categories that I can exploit. Either better margins, or specialized knowledge and selection, or simply having them when no one else carries them.

I went into euro-style boardgames with full knowledge that they might eventually hit a tipping point and appear in the chainstores at discount prices. (In fact, I'm a little surprised it hasn't happened quicker.) I went into new books with full knowledge of the challenges from the mass market, the big chain bookstores, and Amazon. (Though I didn't really see e-books coming on so strong.)

But I can make these product lines work in the margins -- and also get better margins in the buying process. The "margins" is a pun for both the placement of the product and the prices I pay.

I'm guessing that I'll need to deal with a slow erosion of sales in comics, graphic novels and books, as the e-world gets bigger. There may be compensations, such as decreased competition (hard to see how Barnes and Noble can be in it for the long run). But basically, I'll need to make each of the margins I'm currently getting improve to compensate for e-book incursions. This isn't going to all happen immediately; but the time to deal with it is now.

My New book sales are still increasing -- because I'm getting more and more and better books and displaying them better.

I look at the products I have in stock, and I'm pretty confident that I can keep adjusting, keep responding to which products are selling at the moment, to keep sales above my break-even point. Or increase my profit margins by being selective and efficient, which the longer I do it, the more I become.

Finally, I'm really having fun bringing in new books. The more I do it, the more I feel comfortable taking chances on new titles. I'm carrying best-sellers more than before, such as Stephen King's 11/22/63 or The Night Circus; because I'm figuring out how to do it.

My new book section is like a new toy, and I'm really enjoying making it work. And that too is keeping me engaged in my business.

My budget is constructed so that there is enough of a margin that I take home the same amount of pay whether sales are strong or weak. (If they got super weak, they might change -- but probably not even then, since I can adjust other things.) (If they got super strong, I might put more money into savings.)

All that usually happens is either I buy more stuff or less.

So my focus has been on making the store something that I can be proud of.

About Me

I'm Duncan McGeary, owner and/or operator for the last 33 years of Pegasus Books in Downtown Bend, Oregon. These days I'm writing books as well as selling them.
I'm the comic book guy. But even more so, I'm a book book guy. Books of all kinds. Big books and little books, children's and adult, fiction and non-fiction, hardback and paperback and trade paperback and graphic novels. Books with more words than pictures and books with more pictures than words. They are all part of the book world to me, and I love being surrounded by them every day.
I also have a second blog: Pegasus Books, where I list the product coming in over the next week.